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U.S. stock market ends mostly higher as earnings pour in

By Alex VeigaThe Associated Press

Posted:
04/18/2014 12:01:00 AM MDT

NEW YORK — Corporate earnings pushed U.S. stocks mostly higher on Thursday, but it wasn't an easy ride up.

The stock market appeared poised for its fourth consecutive positive open, but it immediately turned negative as investors sold shares in Google and IBM. The market heavyweights reported disappointing earnings late Wednesday. Earnings from toymaker Mattel and insurer UnitedHealth also dragged down stocks.

But by midmorning, the market started to push higher as traders cheered upbeat results from Morgan Stanley, General Electric and PepsiCo.

"We were expecting this earnings season to be pretty volatile, and it's proven to be true so far, in that we're seeing some differences in the results," said Paul Mangus, head of equity research and strategy for Wells Fargo Private Bank.

The Standard & Poor's 500 index rose 2 points, or 0.1 percent, to close at 1,864.85. Seven of the 10 industry sectors in the S&P 500 gained, led by energy stocks. The Nasdaq added 9 points, or 0.2 percent, to finish at 4,095.52. But the Dow Jones industrial average, hurt by the big drop in IBM, fell 16 points, or 0.1 percent, to close at 16,408.54.

U.S. stock markets will be closed in observance of Good Friday.

Bond prices fell, pushing up the yield on the 10-year Treasury note to 2.72 percent, from 2.63 percent late Wednesday.

After selling off Internet and biotechnology companies last week on concerns the stocks were overvalued, investors turned their attention this week to how companies' businesses are performing. Investors have lowered their expectations for earnings after severe cold in much of the country this winter.

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Investors are now eager to hear what CEOs have to say about business prospects going ahead.

"Going into this quarter, expectations are low, so if you disappoint on low expectations, you're likely to be penalized," he said. "However, they also present the opportunity for some significant beats because the estimates are that low."

Among companies whose earnings pleasantly surprised investors was General Electric, which described the economic situation as "positive" and said its industrial division was doing well. Another positive signal came from PepsiCo, which reported a higher profit after slashing costs and selling more snacks.

Despite the big-name decliners, the latest wave of quarterly results has been mostly positive, said John Fox, director of research at Fenimore Asset Management.

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